OPINION AND ANALYSIS | 02-09-2017 14:18

UK’s Labour takes hard line on soft exit from European Union

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What does Brexit hold for the United Kingdom? | Cedoc.

The outlook for the status of Britain in Europe has altered again. Britain’s Labour Party announced last week a dramatic shift in policy against Theresa May’s Conservative Party on leaving the European Union in March 2019. Labour, led by Jeremy Corbyn, wants continued membership of the EU’s single market and full participation in the bloc’s customs union during an extended transition. The policy switch is a stated wish for a “soft Brexit” (the latter word a reference to the “British exit” term that was used in the referendum campaign in June last year). This newly framed line by Britain’s main opposition party brings forward the possibility of a second referendum.

This novelty does not make the Brexit affair clearer for the country, let alone most Europeans and all foreigners. However, Labour’s decision to get off the fence and therefore oppose Prime Minister Theresa May, the Conservatives and a right-left mix, does not make circumstances clearer. It helps to have a neat political divide where the rivals can explain (hopefully with some clarity) what Brexit means to the individual. Although it would not be easy, Labour could win backing in Parliament from the Scottish National Party (SNP) which opposes the UK’s exit from Europe. And it will certainly have the vote of the few minority Liberal Democrats. Labour’s shift has coincided with the start of “serious negotiations” last week, as sought by EU members in face of the light attitude taken by the UK’s minister for Brexit, David Davis. Hence there is an outside chance that the financial and political upheaval that Brexit points to may be prevented from altering the face of Europe for a long time ahead.

‘The damaging effects of Brexit are noticeable. The pound’s value has slipped to just above par with the Euro and some doom dealers in small business groups claim that thousands of companies “have moved” to Ireland..’

Former Italian prime minister and expresident of the European Commission, Romano Prodi, has warned that Britain is about to commit suicide and plunge Europe into chaos. An opinion poll carried out in London a month ago showed that 60 per cent of those questioned wanted to stay in Europe. Among the young (those aged 18 to 24), 85 per cent aspired to keep European citizenship. And since early July, UK businesses have been demanding to know what arrangements will be in place after March 2019 to plan investment and an orderly approach to withdrawal. Cultural and business leaders said they had voted to keep the right to live and work in Europe.

Confidence in a fresh beginning was promised by Brexit advocates loudly led, after initial rejection, by the former mayor of London and the now foreign secretary, Boris Johnson. But the dwindling hope for positive change in a swathe of the public is due to the lack of reassurances from the political classes. Prime Minister Theresa May, at 61, sat on the fence ahead of the referendum on June 23 last year. She succeeded David Cameron at the head of the Conservative government and now leads the UK into the arduous Brexit conflict. On the way she saw her party lose a substantial parliamentary majority in the general election on June 8, and her poor showing at July’s G20 meeting in Hamburg left Britain looking a sorry partner.

The damaging effects of Brexit are noticeable. The pound’s value has slipped to just above par with the Euro and some doom dealers in small business groups claim that thousands of companies “have moved” to Ireland. In fact they may have changed their registration address to Dublin, the physical move has not taken place, yet. There have been rumblings of revolt in the Conservative Party where even ministers have questioned the abilities of the prime minister to carry through the exit. She “is seen to have an inadequate view of the future,” according to one political analyst. A Liberal Democrat leader has ventured that Brexit will never happen. But this is not easily envisioned either as Europe will have to invest time and money in renegotiating itself, whether Britain leaves or stays.

‘There have been rumblings of revolt in the Conservative Party where even ministers have questioned the abilities of the prime minister to carry through the exit.’

The battle over Brexit is the run-up to a major overhaul of Europe as from 2019. That cannot be avoided. The mood for such a circumstance is captured by Tim Shipman, the political editor at the Sunday Times, perhaps one of the most sensitive posts in the British press, in his massive (nearly 700 pages) book, All Out War - The Full Story of Brexit. Shipman retraces recent history from January 2013 when David Cameron announced his intention to hold a referendum if his renegotiations with Europe fell short of what was being demanded by a cross-section of the British Parliament. Shipman’s political history reads like a thriller — but it also reflects a country in a complicated maze.

The Financial Times suggested that there could be a retreat into the European Free Trade Association (EFTA, a group which is now formed by Norway, Sweden, Liechtenstein and Iceland) which Britain helped found in 1959 as a rival to the then-European Economic Community (EEC) or “Common Market.” But Britain patriotically pulled out of the smaller EFTA gathering in 1973 and entered Europe, under conditions largely imposed by Charles De Gaulle, reflecting his stated opinion that Britain could only join on terms set by himself.

How strongly this mood of economic change will spread is hard to guess. British writer Paul Mason, 57, charted a new path in his book, The End of Capitalism, which was published in 2015. His proposals promoted wide intellectual debate about a gentler form of state intervention in society. Mason advocates a new style of mixed economy and the end of conventional hard-nosed capitalism. Perhaps a new form of social welfare state. The very short-term economy minister (January to July 2015) of Greece, Yanis Varoufakis, 56, is currently addressing audiences of thousands on European tours explaining why he thinks his country should have withdrawn from the EU’s stranglehold. His theme turns on the need for much more benevolent, less “neo-liberal” policies. But it is perhaps still too soonto achieve such difficult, if necessary, change in Europe.